Weight Watchers Teams Up With DJ Khaled, And Oprah Gets $26 Million Richer

Oprah Winfrey, who owns a majority stake in Weight Watchers, gains millions after DJ Khaled pledges to 'Freestyle" his way to weight loss via Weight Watchers. Andrew Chin—Getty Images

As music star DJ Khaled announced plans to shed pounds via Weight Watchers’ Freestyle program, entertainment giant Oprah Winfrey is gaining millions from her stake in the company.

Since DJ Khaled revealed Tuesday that he would socialize his weight loss journey using the company’s product, shares of Weight Watchers wtw have gained nearly 9%. The positive sentiment also helped push Winfrey’s 10% stake in the company up by about $26 million, to roughly $309 million in that same 24-hour period.

As of mid-day trading, however, that stake has somewhat pared its gains, falling to $293 million, or a $7 million gain for Winfrey—a drop in the bucket for the entertainer worth $2.8 billion based on Forbes estimates.

Read more!

Still, Weight Watchers is a winning stake for Oprah. The investment has outperformed the S&P 500 and many of the hottest semiconductor stocks over the past two years. The S&P 500 has posted total returns of 39% since Oprah first bought a chunk of the company in October 2015. Meanwhile, Oprah’s Weight Watchers stake, which she spent about $43.3 million purchasing, has reaped her 577% in gains since then, according to her most recent regulatory filing with the Securities and Exchange Commission in October 2017.

Oprah’s stake in the company has also gained more than one of the best investments in years past: Advanced Micro Devices, a semi-conductor company that has been the second-best performing stock on the S&P 500 between October 2015 and Wednesday.

Winfrey’s gains have come, in part, due to how down beaten the stock was in 2015, and partially, thanks to the power of Oprah’s celebrity status. Since Oprah became the face of the company, Weight Watchers has posted eight consecutive quarters of membership increases.

While some investors may hesitate to jump in on Weight Watchers now given how far its flown, Winfrey doesn’t have the same worry. The entertainer can still reap relatively high returns of 559% as she has the option to purchase some 3.5 million shares at $6.97 a piece as a part of her 2015 agreement—a steep discount to the stock’s current value of $46 per unit.

Whether DJ Khaled will have the same impact on Weight Watchers as Oprah has is yet to be seen. The musician was named social media ambassador for the company and is set to document his weight loss through the company’s Freestyle program (which offers some 200 foods that are considered program-sanctioned) via Snapchat, Twitter, Instagram and Facebook.

Read more!